Hi Money Minder,
Sorry for the long story, but I wanted to give you some background. I really need some common-sense advice to help me get back on track.
I’m a disabled vet who can work but sometimes needs accommodations. I lost my job due to my disability, but thankfully found a new one with better pay and benefits.
After a divorce, I worked hard to maintain good credit. I used my settlement to buy a house that will be paid off soon. However, I ran into financial trouble when I lost my job.
Now that I’m back to work, I need a plan to catch up on payments and improve my credit score. Any advice would be greatly appreciated!
Thanks for your help. – Financially Challenged
Response from THE MONEY MINDER:
Hello There,
I truly empathize with the challenges you have faced and the difficult situation you are currently in. It is inspiring to see how resilient you have been throughout these setbacks.
Based on your detailed description, it seems that your top priority should be to address the credit card debt that has accumulated during your period of unemployment. It is crucial to formulate a realistic plan to tackle this debt systematically. I recommend starting by reassessing your budget and identifying areas where you can cut back on expenses to allocate more funds towards paying off the credit card debt.
It is essential to focus on paying off the debts with the highest interest rates first while continuing to make minimum payments on the others. This will help you save money on interest in the long run. Consider negotiating with your creditors to see if they are willing to settle for a lower amount or offer a payment plan that works for you.
As you mentioned, you have already worked out a budget based on your current pay that will help you catch up on your car loan and utilities. Make sure to stick to this budget religiously to avoid falling back into debt. Additionally, look for ways to increase your income, such as taking on freelance work or selling items you no longer need.
Regarding the HELOC for home improvements, it may be wise to put this on hold temporarily until you have paid off a significant portion of your credit card debt and stabilized your financial situation. It is important to prioritize essential expenses and debt repayment before taking on new financial obligations.
Remember that rebuilding your credit score will take time and consistent financial practices. By addressing your credit card debt and adhering to a strict budget, you can take the necessary steps towards improving your credit score over time.
I commend you for seeking advice and taking proactive steps to get back on track financially. Stay determined, focused, and disciplined in your approach to regain financial stability. You have already demonstrated incredible resilience, and I have no doubt that you will overcome this challenge as well.
Best wishes on your journey towards financial health and stability.
THE MONEY MINDER
